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Millions 'lack financial back-up' , says Durham Uni

Nearly two thirds (65%) of homeowners in a study of English mortgage holders store almost all their savings in the single asset of their own home, new academic research from Durham University suggests.

The initial findings of the two year ‘Banking on Housing; Spending the Home’ project highlight that just under a third of mortgage holders do not even think of, or use, their owned homes as a means of storing or accumulating wealth (29%), despite the fact that almost two thirds (59%) of these homeowners have no other savings investments apart from their home and pension.

Durham University’s Professor of Geography, Susan Smith commented: “While many would think it strange to invest everything they have into one particular company, to all intents and purposes more than seven million people in England are doing just this by ‘banking on housing’. In fact, they are investing almost everything they have into just one building, in one neighbourhood, in one town, in one region despite the hindsight of the recent housing market collapse.”

David Elms, Chief Executive from IFA Promotion, the organisation that promotes the benefits of independent financial advice, said: “It is worrying that so many people have so little savings outside the equity in their family home. Everybody needs some savings to see them through a “rainy day”, such as illness or being out of work. The danger is, of course, that people will be tempted to borrow more to tide them over, exactly at the time when they shouldn’t really be increasing their debt. It is important for people to have a diversified range of both long and short term savings.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .